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On April 7, 2017, Governor Brown signed Executive Order B-40-17, ending the drought state of emergency in most of California.  Drought restrictions will remain in effect in Fresno, Kings, Tulare, and Tuolomne counties, which continue to face drinking water shortages and diminished groundwater supplies.  The new Executive Order rescinds the emergency proclamations from January and April 2014, along with four drought-related executive orders.

Over the last few years, the California legislature has passed several bills aimed at water conservation within community associations. AB 2100 amended Civil Code Section 4735 to prohibit associations from fining or threatening to fine an owner for failing to water vegetation or lawns during a state or local government-declared drought.  SB 814 also authorized penalties for excessive residential water use during periods of government-declared droughts. Now that the state of emergency has been lifted, these laws are no longer in effect, provided the local jurisdiction has not declared a local drought.

AB 2104 further amended Section 4735 to restrict an association from prohibiting low-water using plants as a group, and AB 349 amended Section 4735 to restrict an association’s authority to prohibit artificial turf.  Although the drought restrictions have been lifted, this legislation protects homeowners from having to reverse or remove any landscaping measures that were installed in response to the government-declared drought.

The State Water Resources Control Board (SWRCB) also adopted emergency regulations that subject associations to fines of up to $500 per day for violating the provisions of Section 4735.  These regulations will remain in effect until November 25, 2017, or until they are modified or repealed by SWRCB.

The decision to lift drought restrictions was partly based on unprecedented water conservation.  Californians saved more than 20% of urban water since the Governor mandated water use reductions in 2015.  Despite the record levels of water conservation, the State cautions, “This drought emergency is over, but the next drought could be around the corner,” said Governor Brown. “Conservation must remain a way of life.”

Executive Order B-40-17 continues the provisions in the previous Executive Order, “Making Water Conservation a California Way of Life.”  Permanent restrictions prohibit the use of potable water for:

  • hosing off sidewalks, driveway and other hardscapes;
  • washing automobiles with hoses not equipped with a shot-off nozzle;
  • using non-recirculated water in a fountain or other decorative water feature;
  • watering lawns in a manner that causes runoff, or within 48 hours after measurable precipitation; and
  • irrigating ornamental turf on public street medians.
California HOA lawyers The SWRCB will continue to plan for future droughts and promote water conservation as a way of life, which may result in more legislation.  

Blog post authored by TLG Director of Business Development, Ramona Acosta.

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pest-controlOnce again the first of the year brings new legislation impacting common interest developments. The passage of Assembly Bill 2362 adds Civil Code section 4777 to the Davis Stirling Common Interest Development Act effective January 1, 2017.  The intent of this bill was to require the same written notification of pesticide application to separate interests and common areas of common interest developments by a non-licensed pest control operator (i.e., the association’s general landscaper) as residents would receive under the existing law for pesticide application by a licensed pest control operator.

You may recall in 2014 California Code of Regulations (CCR) Sections 6000 through 6619 were adopted to govern pesticides and pest control operations. Under Section 6618(b)(1) association vendors that perform pest control services are required to provide associations with certain information concerning the application of pesticides, and associations are required to distribute that information to their residents on a regular basis.

The new Civil Code section 4777 requires associations applying pesticides to a separate interest or the common area by an unlicensed pest control operator to notify the owner and tenant of the affected separate interest, and if the operator will be using a broadcast application (spreading pesticide over an area greater than two square feet) or using total release foggers or aerosol sprays, to notify the owner and tenants of adjacent separate interests that could reasonably be impacted by the pesticide use.  The notice must contain the pest(s) to be controlled, the name and brand of the pesticide product to be used, the date, time and frequency of application (stating that the date, time and frequency are subject to change), and a healthy and safety statement to be copied into the notice.  A copy of the written notice must also be attached to the minutes of the next association board meeting.

Where pesticides are to be applied to a separate interest, at least forty-eight (48) hours prior written notice must be given to the owner and tenant of the separate interest, along with any adjacent impacted owners and tenants.  For applications to the common area, notice must be posted in a conspicuous place near the area to be treated, if practicable, otherwise, individual notice must be given to the owner(s) and tenant(s) of the separate interests adjacent the common area to be treated.  Notice to tenants may be accomplished using first-class mail, personal delivery to a tenant at least 18 years old, or electronic delivery if the tenant has provided an electronic mailing address.

California HOA laws Section 4777 also provides helpful definitions for terms including pest, pesticide, licensed pest control operator, and broadcast application, and the statute authorizes owners and tenants to agree to immediate pesticide application when necessary.

Blog post authored by TLG attorney, Terri A. Morris.

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sb-814-california-water-usage-hoa-e1484179755582California is experiencing the worst drought in over a century.  As a result, the California Legislature has enacted a number of laws aimed at water conservation.  Existing law requires the Department of Water Resources and the State Water Resources Control Board to take appropriate actions to prevent unreasonable water use.  To further the goal of preventing unreasonable water use, Governor Jerry Brown signed into law new legislation prohibiting excessive water use by residential customers during a drought (SB 814).

Specifically, SB 814, which adds Chapter 3.3 to Division 1 of the California Water Code, requires “urban water suppliers” to “establish a method to identify and discourage excessive water use.”  (Water Code § 366(b).)  Accordingly, a water supplier may adopt one of the following methods: (1) a rate structure using block tiers, water budgets, penalties for prohibited uses, and rate surcharges, or (2) an ordinance, rule or tariff (collectively, “Ordinance”) that defines the procedure by which water suppliers are to recognize and deal with excessive water use.  A violation of an Ordinance is punishable by a fine of at least $500 per one hundred (100) cubic feet of water, or seven hundred forty-eight (748) gallons, above the established threshold.

California HOA laws In light of the foregoing, Associations should be mindful of the new prohibition against excessive water use, especially in condominium projects where the units are not separately metered.

Blog post authored by TLG attorney, Matthew T. Plaxton.

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janitorial-e1483995561223AB 1978 creates the Property Services Workers Protection Act.  Adding Part 4.2 (commencing with Section 1420) to Division 2 of the Labor Code, it requires every janitorial business within the State of California to register yearly with the Commissioner of the Division of Labor Standards Enforcement (“DLSE”) and pay a yearly fee of $500.00.  “No employer may conduct any janitorial business without a valid registration.”

It requires employees and employers of janitorial businesses to participate in a biennial in-person sexual violence and harassment prevention training course.  The course is to be developed by the DLSE by January 1, 2019.

Any janitorial business which does not have a current and valid registration is subject to a fine of $2,500.00.  Additional fines may be imposed including a fine of $100.00 for each calendar day that the business is unregistered with a maximum fine of $10,000.00.

Businesses (including Homeowner Associations) which contract with unregistered and unlicensed janitorial businesses are subject to fines of $2,000.00 to $25,000.00.

How will you know if the janitorial business is registered?          

The DLSE is required to maintain an online Janitorial Contractor Registry which is to be a public database of property service employers on the website of the Department of Industrial Relations (“DIR”) including the name, address, registration number, and effective dates of registration of all janitorial businesses.

AB 1978 was signed into law on September 15, 2016, and becomes effective on July 1, 2018.

California HOA lawyers Be proactive: Verify online through the Janitorial Contractor Registry that your janitorial workers are employed by a licensed janitorial business.  If you don’t, your Association may be subject to fines of $2,000.00 to $25,000.00.

Blog post authored by TLG attorney, Bruce R. Kermot.

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street-sweeperThe California Air Resources Board (“ARB”) passed a regulation (“Regulation”) that requires diesel trucks and buses that operate in California to be upgraded to reduce emissions.  The Regulation has a direct impact on HOAs and requires them to take steps to verify that certain vehicles they hire are properly certified with the State.   The Regulation requires lighter and older heavier trucks to be replaced starting January 1, 2015.  By January 1, 2023, nearly all trucks and buses will need to have 2010 model year engines or equivalent.

The Regulation requires that any party (including HOAs, board members, and managing agents) that hires or directs the operation of any vehicle subject to the Regulation, must verify that each hired company is either in compliance with the regulation or has reported compliance to the ARB.  The Regulation does not apply where the party does not hire or direct the operation of any vehicle subject to the Regulation.  The types of vehicles that an HOA or its managing agent may encounter include but are not limited to the following: street sweepers, dump trucks, pumper trucks, crane trucks, charter buses, lift trucks, concrete pump trucks, and tow trucks.

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Labor-Unions-Preventive-Practices-1024x683On August 27, 2015, the National Labor Relations Board (“NLRB”) published its decision in the Browning-Ferris Industries of California, Inc. case (“BFI Case”). In that case, Browning-Ferris Industries of California, Inc. (“BFI”) retained the services of Leadpoint Business Services (“LBS”) to provide staff to one of BFI’s recycling facilities. The contract between BFI and LBS recognized, and the parties understood, that the personnel staffed by LBS were the employees of LBS. Nevertheless, given the fact that the contract granted BFI with some control over the employees of LBS, the NLRB concluded that BFI was a joint-employer of LBS thereby obligating BFI to comply with federal labor laws.

In adopting a new legal standard for determining joint-employer status, the NLRB emphasized that such a determination should not be based solely on actual control over the employees of another, but the “existence, extent, and object of the putative joint employer’s control.” (Browning-Ferris Industries of California, Inc. (2015) 2015 NLRB No. 672, *12 (Emphasis added).) Otherwise, employers would be able to insulate themselves from their responsibility to comply with federal labor laws. (Id. at p. *21) Accordingly, as long as a company retains (e.g., through the execution of a contract) the authority to control the employees of another, said company shall be given joint employer status. (Id. at p. *2.) This is true even if control is exercised indirectly (e.g., through an intermediary). (Id.)

Many associations retain a community management firm for the purpose of executing the duties of the association. These community management firms in turn employ community managers and support staff to manage these associations. While historically recognized as the employee of the community management firm (and an independent contractor of the association), the BFI Case raises some questions with respect to the nature of the relationship between the employees of a community management firm and the association. Accordingly, associations must be cognizant that a Court may find that it is a joint employer of the community manager (and support staff), notwithstanding the fact that it exercises no direct and immediate control over said manager.

Similarly, associations and management companies must take care when hiring maintenance and service providers for the community.  When managers, committee members, or board members are conducting job walks with a contractor’s employee, reviewing specifications, or receiving invoices, the management company and the association may become joint employers. In Heiman v. Worker’s Compensation Appeals Board, Cal: Court of Appeal, 2nd Appellate Dist., 3rd Div. 2007 (“Heiman”), a community association manager hired an unlicensed and uninsured contractor on behalf of the association to install rain gutters on the condominium buildings.  An employee of the contractor was seriously injured on the first day of the project and sued the contractor, management company, and association for workers’ compensation.  The Court held that the contractor, the association, and the management company were all joint employers because the contractor hired the injured employee, and the management company, as agent of the association, hired the contractor.  The BFI Case seems to affirm this decision.

California HOA laws In order to insulate the association from a possible finding of joint-employer status, the association should ensure that its contract with independent contractors, requires all proper licenses and insurance, adequately sets forth the desired results, and sets forth the level of care and skill to be used in accomplishing the desired results. (See Id. at p. 12 (“mere ‘service under an agreement to accomplish results or to use care and skill in accomplishing results’ is not evidence of an employment, or joint-employment relationship”).) The agreement should also include a provision that requires the contractor to indemnify and hold the association harmless in the event a labor dispute arises.

Blog post authored by TLG attorney, Matthew T. Plaxton.

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hoa-water-usageIn April of last year Governor Brown ordered mandatory water use reductions for the first time in California’s history in order to address the prolonged California drought crisis. That order directed the State Water Resources Control Board (SWRCB) to impose a twenty-five percent (25%) reduction on the state’s 400+ local water supply agencies. Complying with these mandated reductions caused communities throughout the state to immediately and drastically address their water usage and conservation practices, and to incur significant expense in doing so. This order was issued amidst a string of legislative and regulatory changes aimed at addressing the historic drought. For example, legislation was enacted to prohibit homeowners associations (HOAs) from fining homeowners for failing to water their lawns during the drought, and the SWRCB adopted emergency regulations that subject HOAs to fines of $500 per day for failing to comply with the SWRCB’s restrictions on potable water use.

In an apparent policy reversal, yesterday the Governor lifted the 25% mandated statewide water reduction. The Governor’s new executive order directs the SWRCB and the Department of Water Resources (DWR) to work with water suppliers to develop rules and water use targets that are tailored to the unique conditions of their respective regions.

Under the new rules, which take effect on June 1, communities would set water reduction guidelines based on their own projection of water supplies with the assumption that the next three (3) years in California will be uncommonly dry. The state would then review the projections and impose restrictions on communities it determines are being unrealistic. These rules and restrictions are consistent with legislation proposed earlier this year (SB 814) that, if adopted in its current form, would require water suppliers to establish their own methods to identify and restrict excessive water use.

California HOA laws These rules may lead to a significant reduction, or even an elimination, of water reduction mandates that have compelled HOAs to drastically alter their water usage and watering practices at substantial costs to the HOAs and their membership. The $500 daily fine to which HOAs are subject remains in effect; however, allowing for water reduction mandates to now be established at local levels will hopefully result in more sensible water reduction targets.

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hoa vendorsOne of the primary purposes of any homeowners association (HOA) is to manage, maintain and repair the common areas throughout the HOA’s development. This naturally requires the HOA to contract with third-party vendors to furnish goods or services to the HOA (e.g., landscaping, construction, remediation, painting, plumbing, etc.). We are consistently surprised at how some Board members and management professionals fail to recognize how the HOA’s use of improperly vetted vendors can result in potentially significant legal and financial implications for the HOA, among other problems. Therefore, the need to properly vet vendors—and their contracts—is critical before the Board executes any vendor’s contract on behalf of the HOA.

We previously drafted a library article entitled “HOA Concerns in Contracting with Vendors” that provides some guidance as to how a HOA’s Board and Managing Agent can protect the interests of the HOA and its members. This blog post touches on some of the information contained in that article, and sets forth some recommended procedures which should be utilized before any vendor begins work at the HOA’s development.

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hoa-mold-growth*New Legislation

Existing law requires a landlord to repair certain “dilapidations” that render a unit untenantable. SB 655 (Mitchell) was proposed earlier this year in order to specify a landlord’s responsibilities in connection with repairs to a building that are necessitated by the presence of mold. SB 655 was approved on October 9, 2015 and its changes to the law will become effective January 1, 2016.

As a result of SB 655’s passage, new Section 1941.7 will be added to the Civil Code in order to alleviate a landlord’s responsibility to repair mold damage until the landlord receives notice or if the tenant is in violation of his/her obligations specified under Civil Code Section 1941.2. What’s more significant is how SB 655 will also amend Sections 17920 and 17920.3 of the Health & Safety Code to include “visible mold growth” as a substandard building condition that could subject a landlord to criminal penalties (misdemeanor), with a limited exception provided for mold that “is minor and found on surfaces that can accumulate moisture as part of their properly functioning and intended use.”

SB 655 speaks to landlords (a “lessor of a building”), and not necessarily homeowners associations (“HOAs”). However, courts have applied landlord/tenant law to HOAs in certain circumstances, such as those involving issues of life safety. (See Frances T. v. Village Green Owners Assn. (1986) 42 Cal.3d 490.) Thus, there is a concern circulating throughout the HOA industry that a condominium HOA (i.e., its Board or management) could now face criminal liability for its unreasonable failure to address reports of mold and to take appropriate corrective measures.

hoa law firm We do not believe that SB 655 will ultimately subject HOA Boards or management professionals to criminal liability. However, SB 655 does underscore how important it is for a HOA to immediately address reports of mold and to take appropriate action. A HOA Board should consider working with the HOA’s attorney to adopt a formal water intrusion/mold policy. That policy would help educate members on their obligations to immediately notify the HOA and its management of the presence of mold within their Units, and would also specify the HOA’s policy in responding to reports of mold.

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hoa-recycled-water*New Legislation

We have blogged about legislation enacted in 2014 that made several changes to Civil Code Section 4735 in response to California’s continuing, record-breaking drought. One of those changes served to prohibit HOAs from fining homeowners for failing to adequately water vegetation or lawns during government-declared drought periods. Earlier this year, AB 349 was signed into law to make further changes to Section 4735. One of those changes served to restore a HOA’s authority to fine homeowners for failing to water, provided that the HOA “uses recycled water…for landscaping irrigation.” (Former Civ. Code § 4735(c).)

Questions then arose as to the circumstances which would allow for a HOA to qualify for this exception and thus be permitted to fine homeowners for failing to water. For example, would a HOA have to use recycled water for all of its landscaping irrigation, or just a portion of its landscaping irrigation? To remedy this ambiguity, AB 786 was proposed this year as an urgency statute based upon the following findings by the California Legislature:

“…some homeowners associations have interpreted existing law to allow them to fine homeowners who voluntarily cease using potable water on their landscaping if the homeowners association itself is using a de minimis amount of recycled water on common areas. This is directly contrary to the state’s need to conserve the precious and dwindling water supplied for urban, agricultural, and environmental needs.”

AB 786 therefore sought to make additional amendments to Section 4735 to clarify that a HOA’s authority to fine homeowners for failing to water during drought periods extends only to situations where the homeowner’s property subject to the fine has previously received, and continues to receive, recycled water for landscaping irrigation. Thus, the Legislature illustrated its original intent to shield only those homeowners who voluntarily cease using potable water for their landscaping irrigation from being fined by their HOAs; homeowners with access to recycled water would still be subject to fines if they failed to use that recycled water for their landscaping irrigation.

AB 786 was signed into law on October 13, 2015 and its changes took immediate effect. Subdivisions (c) and (d) of Section 4735 now state in pertinent parts that:

“(c) Notwithstanding any other provision of this part, except as provided in subdivision (d), an association shall not impose a fine or assessment against an owner of a separate interest for reducing or eliminating the watering of vegetation or lawns during [government-declared drought periods]…”

“(d) Subdivision (c) shall not apply to an owner of a separate interest that, prior to the imposition of a fine or assessment as described in subdivision (c), receives recycled water…and fails to use that recycled water for landscaping irrigation.” (Emphasis added.)

hoa laws AB 786 fortunately resolves yet another ambiguity that was created by rushed legislation. HOA Boards and management professionals whom are opposed to having a sea of “brown lawns” within their communities should consult with their HOA’s legal counsel for guidance.